Nishad Singh, the former chief engineer of the now-defunct FTX cryptocurrency exchange, is scheduled to be sentenced on Wednesday for his involvement in the theft of approximately $8 billion in customer funds. This fraudulent activity was orchestrated under his former boss, Sam Bankman-Fried, who is currently imprisoned.
Singh’s Guilty Plea and Cooperation with Authorities
Singh has pleaded guilty to six felony counts of fraud and conspiracy. Last year, he testified as a prosecution witness in the trial that resulted in Bankman-Fried’s conviction on multiple charges, including fraud. As part of his plea deal, Singh acknowledged his participation in what prosecutors describe as one of the largest financial frauds in U.S. history. He also admitted to acting as a “straw donor” in connection with Bankman-Fried’s substantial political donations.
Bankman-Fried, 32, is serving a 25-year prison sentence at the Metropolitan Detention Center in Brooklyn following the collapse of FTX in November 2022.
Expectations for Singh’s Sentence
At 29 years old, Singh is expected to receive a significantly lighter sentence from U.S. District Judge Lewis Kaplan. The sentencing hearing is set for 3 p.m. ET (1900 GMT) in federal court in Manhattan. Prosecutors have recommended leniency for Singh, while his legal team has argued that he should not face any prison time.
In an Oct. 23 court filing, the U.S. Attorney’s Office in Manhattan acknowledged Singh’s cooperation, stating, “Singh provided substantial assistance to the government in its investigation and prosecution of wrongdoers, and in its recovery of assets for victims.”
Previous Sentencing of FTX Executives
Last month, Judge Kaplan sentenced Caroline Ellison, Bankman-Fried’s former girlfriend and an executive at Alameda Research, to two years in prison. Although he commended her cooperation, he emphasized that such assistance does not equate to a “get out of jail free card” in serious cases.
Singh’s attorneys noted in a court filing on Oct. 16 that he became involved in the conspiracy relatively late, after Bankman-Fried and Ellison had already decided to use billions of FTX customer funds to cover losses at Alameda.
Bankman-Fried’s Rise and Fall
Bankman-Fried capitalized on a surge in cryptocurrency prices during the COVID-19 pandemic, reaching a net worth of $26 billion by October 2021, according to Forbes. He was recognized for his philanthropic contributions and political donations, particularly to Democratic causes. However, his fortune dwindled following the collapse of FTX, triggered by a wave of customer withdrawals.
During the trial, Singh recounted a crucial conversation he had with Bankman-Fried on the balcony of their shared $35 million Bahamas penthouse. He confronted Bankman-Fried about a significant shortfall in customer funds, to which Bankman-Fried replied that he would secure more funding and reduce costs.
Ongoing Legal Proceedings
Bankman-Fried is currently appealing his conviction and sentence, arguing that Judge Kaplan incorrectly excluded evidence that suggested he believed FTX had sufficient funds to fulfill customer withdrawals.
Another former FTX executive, Gary Wang, who also cooperated with prosecutors, is set to be sentenced on Nov. 20.
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